Novozymes reports strong Q2, driven by organic sales growth and nutrition

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11 Aug 2017 --- Novozymes has announced its results for the first half of 2017, the company reported a good first half with 3 percent organic revenue growth which was better than expected. Food & Beverages sales grew by 8 percent organically and by 10 percent compared with H1 last year. In Q2 year on year, organic growth stood at 10 percent and 12 percent. 

Growth in Food & Beverage segments came across most categories. Nutrition, starch and beverages contributed the most in the first half. Baking performed very well in the second quarter, with strong EMEA performance more than offsetting the negative impact from the announced price reductions in the North American fresh keeping market.

Organic sales growth is expected to be driven primarily by new products launched in the grain-processing industry in 2016 and 2017 (organic: +8 percent 1H year on year, +10 percent Q2 year on year). Baking is still expected to be impacted by price reductions in the North American fresh keeping market, while sales are expected to perform well in other markets. In general, most of the industries within Food & Beverages are doing well after the first half. Novozymes are encouraged by the strong first-half performance and are optimistic about the year, while still acknowledging that it may be difficult to maintain the high growth level for the rest of the year.

Nutrition sales continued to perform solidly into Q2, mainly in the developed markets, driven by increased demand for lactose reduction in dairy and a recovery in enzymes for infant nutrition. Starch contributed to growth, driven by China and North America, although growth in the second quarter was more modest than the high rate experienced in the first quarter. Lastly, sales for beverages in the first half increased over last year, with sales for distilling and juice and wine as the main contributors. Brewing was on par with last year after a soft second quarter.

Andrew Fordyce, Executive Vice President, Food & Beverages at Novozymes told FoodIngredientsFirst: “For Food & Beverages, our aspiration is to deliver solutions that help our customers improve the quality and sustainability of their food and beverage products. I’m pleased to see our efforts focusing on growth platforms paying off in 2017 in many markets.” 

“Europe, the Middle East and Africa contributed most in the first half with very strong Q2 growth in both baking and nutrition.”

“In baking, we’re gaining share as well as penetrating opportunities in emerging markets within the region. The EMEA baking growth we’ve seen has been strong enough to offset the negative impact from the announced price reductions in the North America baking business,” says  Fordyce.

“Food and nutrition in EMEA also performed well, with our categories in infant formula and low-lactose dairy continuing to deliver growth. A good part of the growth comes thanks to a faster roll-out of Saphera, our new lactose reduction technology.” 

“Brewing was another strong growth contributor in the EMEA region. Specifically, we are seeing that in Africa, use of local raw materials, like sorghum, continue to gather strength and that is driving higher enzyme consumption,” he explains. 

Peder Holk Nielsen, President & CEO said: “Overall, the first half was good and better than expected. We had growth in the large segments and delivered 3 percent organic sales growth with a strong EBIT margin, excluding one-offs. We made important advances in our innovation pipeline within grain milling, vegetable oil and household care opening up new market segments. We should see growth pick up in the second half of the year, but also acknowledge the risk of agriculture-related markets changing swiftly. Consequently, we maintain our full-year expectation for organic growth, while DKK expectations have been adjusted to reflect weaker currencies.”

By Elizabeth Green

Novozymes A/S

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Novozymes is the world leader in bioinnovation. Together with customers across a broad array of industries, we create tomorrow’s industrial biosolutions, improving our customers' business and the use of our planet's resources.

With over 700 products used in 130 countries, Novozymes’ bioinnovations improve industrial performance and safeguard the world’s resources by offering superior and sustainable solutions for tomorrow’s ever-changing marketplace.

Novozymes’ natural solutions enhance and promote everything, from removing trans fats in food to advancing biofuels to power the world tomorrow. Our never-ending exploration of nature’s potential is evidenced by over 6,000 patents, showing what is possible when nature and technology join forces.

Our 6,000+ employees working in research, production, and sales around the world are committed to shaping business today and our world tomorrow.

Novozymes is quoted on NASDAQ OMX Copenhagen A/S.

With Novozymes’ food solutions, you get reliable quality you can count on. Our effective and natural solutions help prepare your business for tomorrow’s demands.

Reduce acrylamide across a wide range of foods with Novozymes Acrylaway®

Enable dairy products to be enjoyed by a wider consumer base with
Novozymes Lactozym® Pure

Ensure extended freshkeeping and superior crumb softness in bread with Novozymes Novamyl®

Create valuable meat protein extract from your co-products with
Novozymes Protamex® and Novozymes Flavourzyme®

Enhance the production of healthy, oat-based beverages with Novozymes AMG® and Novozymes BAN®

Learn how Novozymes Lipopan® is great for your dough and great for your profit!

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